In an alarming development, the Pakistan Democratic Movement (PDM) government added Rs18.5 trillion to the public debt in just 15 months, which was more than the debt accumulated by its arch-rival Pakistan Tehreek-e-Insaf in its three-and-a-half-year tenure, reveals a central bank statement.
Gross public debt jumped from Rs44.4 trillion in March 2022 to Rs62.9 trillion by the end of the fiscal year 2022-23, according to the monthly debt bulletin of the State Bank of Pakistan (SBP). The debt in a mere 15 months increased at a pace of 41.7% amid the absence of any credible strategy to contain it. As a result, the federal government debt, which is the direct responsibility of the finance ministry, jumped to Rs60.8 trillion by the end of June 2023. According to the debt bulletin released on Wednesday, there was an addition of Rs18 trillion in one year and three months’ rule of the PDM government.
The public debt has been multiplying at an unsustainable pace due to uncontrolled expenditures, below potential revenue collection from sectors like real estate, services and agriculture and the sinking rupee against the dollar.
The government of former prime minister Imran Khan had added Rs18.1 trillion to the public debt during its 44-month rule, a threshold that the administration of PM Shehbaz Sharif exceeded in just 15 months. The central bank still needs to compile debt figures for July.
The pace at which the public debt is mushrooming can be gauged from the fact that the Pakistan Peoples Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N) added Rs18 trillion to the debt stock from 2008 to 2018.
Another Rs18 trillion was added from August 2018 to March 2022 by Imran Khan’s government. And now the PDM government added Rs18.5 trillion in just 15 months.
From September 1, 2018, to the end of March 2022, the PTI government added Rs14.5 billion per day to the public debt, which was more than double the PML-N period’s average increase of Rs5.6 billion a day.
Now, the PDM government added on average Rs41 billion per day to the debt stock. When the PTI government’s term ended, the total public debt stood at Rs44.4 trillion, equal to 83.5% of gross domestic product (GDP) before the rebasing of the economy. After rebasing, the public debt decreased by 15% of GDP but there was no reduction in absolute terms.